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Senior Contributor
Walt_K
Posts: 3,065
Registered: ‎11-02-2009
0

Re: My rules for using credit cards.....


stan_the_man wrote:

@Walt_K --

 

I think one of was rules was, or at least should be, never charge what you can't afford to immediately payoff. If your bank raised your interest rate, who cares if you PIF every month.


In which case the rule about not closing a card with a balance is pretty much unnecessary.   It wasn't my list. 


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tinuviel
Posts: 4,877
Registered: ‎11-02-2010
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Re: My rules for using credit cards.....

 


Wolf3 wrote:

 


annalog wrote:
  1. Never apply for or continue to renew a credit card that has an annual fee.   Never pay for credit.
  2. Never charge what you cannot payoff completely before your closing date.   Always bill out at a zero balance.
  3. Go two years without applying for credit and remove all inquiries from your bureaus.  It is possible.
  4. Never close accounts with balances.
  5. Your goal should be to keep enough cards open to reach 50k in available revolving credit (with zero balances.)
  6. Live beneath your means, not within your means or above your means.

Anybody have any other good ones?


 

 

 

1. Some cards are worth the annual fee and can be better than those without it.  Pick what works best for you.

2. Only pay before the closing date if you want to juice your score for an application. 

3. PIF most of the time , by the due date,  Millions of people have great credit who only pay by the due date.  

4  Things happen, there are circumstances when spending the money is worth the interest.  Money is not the most important thing in life. 

5. Apply for credit only when you have need for it.

6.Only apply with people who you want to do business with.

7.Your goal for available credit should match your needs, there is no universal number.

8. Don't have more accounts than you can keep track of. 

9. Don't accept anyones rules as gospel, figure out what works for you. 

 

 

 

 

 


+1. I think that you've come up with a very reasonable set of rules, Wolf3.

 


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Valued Contributor
vish1
Posts: 1,129
Registered: ‎01-20-2011
0

Re: My rules for using credit cards.....

 


tinuviel wrote:

 


Wolf3 wrote:

 


annalog wrote:
  1. Never apply for or continue to renew a credit card that has an annual fee.   Never pay for credit.
  2. Never charge what you cannot payoff completely before your closing date.   Always bill out at a zero balance.
  3. Go two years without applying for credit and remove all inquiries from your bureaus.  It is possible.
  4. Never close accounts with balances.
  5. Your goal should be to keep enough cards open to reach 50k in available revolving credit (with zero balances.)
  6. Live beneath your means, not within your means or above your means.

Anybody have any other good ones?


 

 

 

1. Some cards are worth the annual fee and can be better than those without it.  Pick what works best for you.

2. Only pay before the closing date if you want to juice your score for an application. 

3. PIF most of the time , by the due date,  Millions of people have great credit who only pay by the due date.  

4  Things happen, there are circumstances when spending the money is worth the interest.  Money is not the most important thing in life. 

5. Apply for credit only when you have need for it.

6.Only apply with people who you want to do business with.

7.Your goal for available credit should match your needs, there is no universal number.

8. Don't have more accounts than you can keep track of. 

9. Don't accept anyones rules as gospel, figure out what works for you. 

 


+1. I think that you've come up with a very reasonable set of rules, Wolf3.

 


 

+1. This set makes much more sense to me.  #1 AF rule in particular, its all about individual requirements, if it wasn't every CCC would have only 1 card.

 

A person needs to be sensible enough to do the math and figure out what card works best for him/her.

 

I will add another rule:

10. Don't apply for a card coz your colleague or friend has it. (do your maths)

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Super Contributor
DI
Posts: 5,767
Registered: ‎01-28-2008
0

Re: My rules for using credit cards.....

Annalog-  I love your rules!! 

Contributor
daytrade5
Posts: 114
Registered: ‎03-30-2011
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Re: My rules for using credit cards.....


DI wrote:

Annalog-  I love your rules!! 


I like those rules also... It's pretty simple for me. I don't swipe my credit card if I don't have the cash readily available in my bank account 1st. I always pay my balances before the statement cut off date on all my accounts except for one, which I leave about $50 bucks on or less to pay by the actual due date. If you're buying things that take you three statements or more to pay off then you probably couldn't afford it in the 1st place. Save up the money in a savings account & then purchase the big ticket item on your credit card if you wish. Just my thoughts....

Moderator Emerita
LilMirth
Posts: 3,091
Registered: ‎08-09-2008
0

Re: My rules for using credit cards.....

Well, I don’t think that there are many universal rules that are applicable to the myriad of lifestyles, stages, and financial situations, when it comes to credit card usage. There are some, such as:

 

  1. Never pay late.
  2. Credit lines do not equal “additional income”. Do not make the mistake of getting into the mindset that tells you that your available credit doubles as “savings” or “emergency fund”.

 

For my lifestyle, financial direction, and pattern of usage as it relates to credit cards, the following (in addition to the two above) is how I roll now— a lot of which I’ve seen reflected in the previous posts, but what the hey?:

 

  1. Only apply for new credit cards that I have practical use for: Credit card acquisition is not a game or contest to see how many cards can be acquired, just for the sake of having them. Unused credit lines are not emergency funds. Each application should be well thought out, and should offer something that enhances my consumer experience. A good example of this would be the Blue Cash Preferred by Amex. I drop a good bit of $$$ on groceries (eating healthy foods is waaaay more expensive than eating junk) for my family of six, and usually guests. The 6% on my usual grocery bill will net me a handsome return, and more than offset the annual fee of $75.
  2. Don’t submit less than honest answers when applying for credit: Not that the banks are the most honest entities in the world… or even honest at all, but somebody’s gotta have some integrity, and it starts with me. If Amex decides to do a FR on me, the worst that they’ll find is that my income is grossly understated (DH & I file jointly, but I only include my own income, from my primary source [full-time job] for credit apps, when asked).
  3. Only apply for credit with lenders that I’d otherwise do business with: If I wouldn’t do business with the prospective lender, otherwise, I won’t apply for their credit products. For example, I would never bank with Chase, so you’ll never see me announcing my new Chase Freedom card (unless Chase were to acquire one of my current banks, of course, and then I’d probably close, LOL!).
  4. Don’t apply for more credit cards than I can reasonably manage.
  5. Don’t charge more than I can afford to pay in full: That doesn’t mean *never* carry a balance. It does mean, to me, *almost never carry a balance*, and only do so when a) it is financially advantageous for me to do so (does not build debt or require me to pay interest), and b) there is a clearly defined exit strategy for the loan, plus regular savings or emergency funding to cover it should I ever find myself in a bad spot.
  6. Maximize “rewards” but don’t let the rewards maximize me: In other words, I don’t go out of my way to make purchases that I otherwise wouldn’t or shouldn’t, just to get points or cash back. Instead, when it’s time to get gas, I use my Costco Amex, instead of my USAA Amex, for example. One offers greater rewards at the pump than the other.  I don’t buy things that I don’t need or want because the triple points deal will expire at the end of the month. Nor do I limit myself to retailers where I might not be getting the best deal or that are otherwise undesirable to me, just because shopping at that retailer gets more rewards.
  7. It isn’t necessary to go after ever higher credit lines on existing cards, when the current line is largely unused: AKA – credit line hoarding, LOL! We’ve got to save some for the future Ficoholics, after all! I have some very high credit lines, and a few low ones (my two store cards, and a UMB card that, for whatever reason, hasn’t been closed for lack of use). But, I don’t actively seek CLIs (anymore), because I utilize a very small portion of my available credit each month. ßAnd that’s running just about every purchase that I make through a card.
  8. Check my accounts, online, frequently, and fully review the statements: Our best defense against fraud and identity theft is vigilance.
  9. Opt-out of promotional offers with card issuers: Opt-out of receiving courtesy checks, and shred the pin numbers for credit card (cash advances). I don’t use these things, I want as little of my financial information “shared” with nameless/faceless others as possible, so opting-out is at least a step in the direction of protecting my financial life.
  10.  Don’t take my eyes off the card: Particularly important at high(er) risk places such as fast food restaurants, gas stations, etc… A card can be skimmed or cloned anywhere, but sometimes it happens almost right in front of our eyes. Like, when we’re standing in line at the local fast food emporium, and we give our card to a teller, who drops her hand below the card reader, or he walks to the back office, with our card in his hand, all the while you’re telling little Spencer to stop poking Lilly, and for Lilly to stop sticking her tongue out at strangers.
  11.  Don’t put all the eggs cards in one basket: Or one purse, or one wallet, or leave’em all in the car (I read about someone doing this—the car was stolen). Cards that I’m not using are locked in our safe.
  12.  Authorized Users: The only AUs I will *ever* have are my children (when they’re old enough, appear responsible enough, and have a need), and my DH. Period. I’m not going to openly invite identity theft, or unauthorized charges, outside of my immediate family.
  13.  Get to know the lender/card issuer: Understanding, at least on some level, what makes any one lender nervous can save me a lot of grief. For example, Amex has revolvers, obviously, but any Amex CSR will tell you that revolver or not, they want you to PIF. Always. Barclays BoA wants you to have other accounts with them. Alliant Credit Union asks that you notify them if you’re traveling abroad, or even too far away from your normal usage area. USAA is a little sweeter to those of us who are “full” members. NFCU can be hyper vigilant about fraud, so it’s not a bad idea to let’em know if you’re planning to spend out of pattern, even though it’s not required.

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Regular Contributor
ficofox
Posts: 232
Registered: ‎02-07-2011
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Re: My rules for using credit cards.....

Thread's only value is in offering the opportunity to toss in the word 'Draconian'.

 


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Established Contributor
KingAdrock
Posts: 656
Registered: ‎07-17-2007
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Re: My rules for using credit cards.....

Since everyone keeps pointing out that YMMV for all the rules being given, I can't resist throwing out the proper quote:

 

"They're more guidelines than actual rules."

Established Contributor
happy0510
Posts: 807
Registered: ‎03-07-2008
0

Re: My rules for using credit cards.....

[ Edited ]

daytrade5 wrote:

DI wrote:

Annalog-  I love your rules!! 


I like those rules also... It's pretty simple for me. I don't swipe my credit card if I don't have the cash readily available in my bank account 1st. I always pay my balances before the statement cut off date on all my accounts except for one, which I leave about $50 bucks on or less to pay by the actual due date. If you're buying things that take you three statements or more to pay off then you probably couldn't afford it in the 1st place. Save up the money in a savings account & then purchase the big ticket item on your credit card if you wish. Just my thoughts....


LilMirths #5

 

Is it really that bad to carry a balance for 3-4 months when you have a steady job, bills paid, etc.

 

For instance, the purchase of a "somewhat" larger item. i.e. computer?

When spreading the purchase out over 3-4 months you practically don't even notice the change in your everyday financial life?

Not to mention, you get offered 0% interest, etc.

 

Is this setting myself up for utter failure?

 

By the way, I am a rebuilder and this is one SCARY topic for me, and when I seen the word "draconian" used, it made it worse!

 


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Moderator Emeritus
MarineVietVet
Posts: 14,252
Registered: ‎07-14-2009
0

Re: My rules for using credit cards.....

[ Edited ]

happy0510 wrote:

LilMirths #5

 

Is it really that bad to carry a balance for 3-4 months when you have a steady job, bills paid, etc.

 

For instance, the purchase of a "somewhat" larger item. i.e. computer?

When spreading the purchase out over 3-4 months you practically don't even notice the change in your everyday financial life?

Not to mention, you get offered 0% interest, etc.

 

Is this setting myself up for utter failure?

 

By the way, I am a rebuilder and this is one SCARY topic for me, and when I seen the word "draconian" used, it made it worse!

 


I won't speak for LilMirth (I know better  :smileywink:  ) but I will give my opinion about this.

 

In a perfect world where real life never interferes with our best laid plans then carrying a balance is usually not a good idea because for one thing in many cases it costs you interest.

 

But it's not a perfect world and if there are times when carrying a balance for a few months is necessary then so be it. Just pay it off as fast as you can and don't worry about it. And don't let anyone criticize you for it. We all have to do what we think it right for us.

 

Edited cuz' I kent typ rite!!!

 

 

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